EVT 2044: BRANDING AND

PROMOTIONS

CHAPTER 2:
CUSTOMER BASED EQUITY AND
BRAND POSITIONING
Dr. Maggie Leong Mei K
To Recap....
 Branding is universal and pervasive in
different product categories
 Applicable to both tangible and
intangible offerings of an organization
 Technological developments have
impacted the way firms market their
offerings
 Organizations reap financial benefits
from positive brand images
To Recap....
 Through branding, organizations:
 Create perceived differences amongst
products
 Develop loyal customer franchise
 Create value that can translate to financial
profits
Why Branding?
Learning Objectives
 Define customer-based brand equity
 Outline the sources and outcomes of
customer based brand equity
 Describe the guidelines in developing a
good brand positioning
 Explain brand mantra and how it should
be developed
Customer-Based Brand
Equity
Defining Customer Based
Brand Equity (CBBE)
 Approaches brand equity from the
perspective of the consumer
 Stresses that the power of a brand lies in
what resides in the minds and hearts of
customers
 Differential effect that brand knowledge
has on consumer response to the
marketing of that brand
Figure 2.1- Marketing
Advantages of Strong Brands
Brand Equity as a Bridge
 Brands as a reflection of the past- Marketers should
consider all the dollars spent on manufacturing and marketing products each
year. Thus, the quality of the investment in brand building is the most critical
factor, not the quantity beyond some minimal threshold amount.

 Brands as a direction for the future- Brand equity can offer

focus and guidance.

 Brand equity provides a means to interpret past marketing performance and

design future marketing programs.
Brand Knowledge
 Key to create brand equity
 Creates the differential effect that drives
brand equity
 Marketers need an insightful way to
represent how brand knowledge exists in
consumer memory
Associative Network Memory
Model
 Views memory as a network of nodes
and connecting links
 Nodes - Represent stored information or
concepts
 Links - Represent the strength of
association between the nodes
Figure2.2 - Possible Apple
Computer Associations
Sources of Brand Equity

Strength of the
brand node or trace
in memory.

Consumers’ perceptions about a brand

Brand Awareness
• Brandrecognition: Consumers’ ability to
confirm prior exposure to the brand when
given the brand as a cue/signal.

• Brandrecall: Consumers’ ability to retrieve

the brand from memory when given the
product category, the needs fulfilled by the
category, or a purchase or usage situation as a
cue.
Brand Image
BRAND POSITIONING
Basic Concepts
 Brand positioning
 Act of designing the company’s offer and
image so that it occupies a distinct and
valued place in the target customers’ minds
 Finding the proper “location” in the minds
of consumers or market segment
Target Market
 Market segmentation: Divides the market into
distinct groups of homogeneous consumers who
have similar needs and consumer behavior.
 Involves identifying segmentation bases and
criteria
 Criteria
 Size
 Accessibility
 Responsiveness

 Demographic, behavior, geographic, psychographic

Nature of Competition
 Competitive analysis – considers a whole host of
factors including the resources, capabilities, and likely
intentions of various other firms in order for marketers to
choose markets where consumers can be profitably served.
 Indirect competition – competition between
companies that make slightly different products but satisfy
the same needs.
 Multiple frames reference -broader category
competition or the intended future growth of a brand, or it
can occur when the same function can be performed by
different types of products.
Identify nature of
competition
 Points of Parity and Points of
Difference
Points-of-parity associations Points-of-difference (PODs) are
(POPs), are not necessarily unique formally defined as attributes or
to the brand but may in fact be benefits that consumers strongly
shared with other brands. associate with a brand, positively
evaluate, and believe that they could
not find to the same extent with a
competitive brand.

the luxury and

status imagery
of Louis Vuitton
Positioning Guidelines
Defining and Communicating the
Competitive Frame of Reference
 To determine the category membership.
 The category membership – consumers
categorize the product into a specific group and
understand what the brand offers and what
makes it a superior competitive choice.
Defining and Communicating the
Competitive Frame of Reference
 To communicate category benefits.
 To reassure consumers that a brand will deliver on the
fundamental reason for using a category, marketers
frequently use benefits to announce category
membership.
 These benefits are presented in a manner that does
not imply brand superiority but notes that the brand
possesses establish category POPs.
 Performance and imagery associations can provide
supporting evidence.
 Performance
Imagery
Choosing Points-of-Difference

 There are three key considerations:

 Desirability is determined from the consumer’s point of view.

 Deliverability is based on a company’s inherent capabilities.
 Differentiation is determined relative to the competitors.

Consumers ideally would see the

attribute or benefit as highly
important, feel confident that the firm
has the capabilities to deliver it, and
be convinced that no other brand
could offer it to the same extent
Establishing Points-of-Parity and
Points-of-Difference
 There are three approaches to establish POP
and POD:
 Separate the Attributes
 An expensive but sometimes effective approach is to launch two different
marketing campaigns, each devoted to a different brand attribute or benefit.

 Leverage Equity of Another Entity

 Brands can link themselves to any kind of entity that possesses
the right kind of equity—a person, other brand, event, and so
forth.
 Redefine the Relationship
 Consumers with a different perspective and suggesting that they
may be overlooking or ignoring certain factors or other
considerations.
Straddle Positions

 Company will be able to straddle two frames of reference with

one set of POD and POP.
 In these cases, the POD in one category become POP in the
other and vice-versa.
 While a straddle positioning often is attractive as a means of
reconciling potentially conflicting consumer goals and creating
a “best-of-both-worlds” solution, it also carries an extra burden.
 If the points-of-parity and points-of-difference with respect to
both categories are not credible, consumers may not view the
brand as a legitimate player in either category.

Case example: BMW

Updating Position over Time

 Positioning should be fundamentally changed very

infrequently, and only when circumstances
significantly reduce the effectiveness of existing POPs
and PODs.

 Positioning will evolve over time to better reflect

market opportunities or challenges.

 A point-of-difference or point-of-parity may be refined,

added, or dropped as situations dictate.
Updating Position over Time

 Laddering- progresses from attributes to benefits to more abstract values or

motivations.
 In effect, laddering repeatedly asks what the implication of an attribute or
benefit is for the consumer. Ex: Maslow Hierarchy.
 A consumer chooses a product that delivers an attribute (A) that provides
benefits or has certain consequences (B/C) that satisfy values (V).
 Failure to move up the ladder may reduce the strategic alternatives available to
a brand.


Reacting- Competitive actions are often directed at eliminating points-of-
difference to make them points-of-parity or to strengthen or establish new
points-of-difference.

 Three main options for the target brand:

 A) Do nothing
 B) Go on the defensive
 C) Go on the offensive
Developing a Good
Positioning
 First, a good positioning needs to be aspirational so that the brand
has room to grow and improve.
 Second, a good positioning needs to carefully identify all relevant
points-of-parity and points-of-difference.
 Third, a good positioning should reflect a consumer point of view
in terms of the benefits that consumers derive from the brand.
 Finally, a duality exists in the positioning of a brand such that
there are rational
 and emotional components.

In other words, a good positioning

contains points-of-difference and
points-of-parity that appeal both to
the “head” and the “heart.”
Brand Mantra
 A brand mantra is a short, three- to five-word phrase that captures the
irrefutable essence or spirit of the brand positioning.
 Similar to brand essence and core brand promise.
 They can provide guidance about what products to introduce under the
brand, what ad campaigns to run, and where and how the brand should
be sold.
 Brand mantras help the brand present a consistent image.
Brand Mantra

Food, Folks, Fun

Fun, family, Entertainment

 Implementing a Brand
Mantra
• Communicate: should able to define the category (or categories) of the
business to set the brand boundaries and clarify what is unique.

• Simplify: An effective brand mantra should be memorable. That means it

should be short, crisp, and vivid. A three-word mantra is ideal.

• Inspire: is personally meaningful and relevant to as many employees as

possible.

Authentic, Athletic, Performance

To Sum up...
 To create brand equity, marketers
should:
 Create favorable consumer response i.e.
brand awareness
 Create positive brand image though brand
associations that are strong, favorable, and
unique
To Sum up…
 To appropriately position a brand,
marketers should:
 Identify their target customers
 Analyze the type of competition they might
face in the identified market base
 Identify product features and associations
that are different or similar to their
competitors
To Sum up ...
 Brand positioning describes how a brand can
effectively compete against a specified set
of competitors
 A good product positioning should:
 Have a “foot in the present” and a “foot in the
future”
 Identify all relevant points-of-parity
 Reflect a consumer point of view in terms of
the benefits that consumers derive
 Contain points-of-difference and points-of-parity
that appeal both to the “head” and the “heart”
To Sum up...
 A good brand mantra should:
 Communicate the category of the business
to set the brand boundaries and clarify
what is unique about the brand
 Be simple, crisp, and vivid
 Stake out ground that is personally
meaningful and relevant to as many
employees as possible